Sunday, May 9, 2010

Starting a game company with multiple products

Listening to the last Paper Money podcast, where Ben and Rett talked about Jackson Pope closing up Reiver Games, I noticed they'd said one of the things he'd done right was starting up with multiple titles. They said this gives the company a bump in status over other startups. Specifically, they indicated that having more than one product will make distributors take you more seriously. Michael Mindes of Tasty Minstrel Games has mentioned that as part of his strategy too, at his blog.

This seems on the surface like good advice. In the six months or so that I've been exploring this in detail, and in the years that I've been observing from more of a distance, I've seen that there are lots of individuals who pay to produce a single game - they'll make the big bet, invest a pile of money, print up some games, and see what happens. A few of these games are great; of the great ones, some go on to sell well, and a fraction lead to the best possible outcome, the jackpot - they serve to launch a new game company, or they get picked up by a major company and distributed widely. But that's just a fraction of a tiny few. Most of these self-published games are pretty crappy - essentially vanity projects that nobody is going to buy, put out on the market with no research and no real understanding of what makes a good game or how the industry works.

The Purple Pawn even has an acronym for this kind of venture, the SGGC, or single-game game company. On their Terminology page, they define it thusly:

sggc: Single-game game company. Most companies never get beyond this stage, even if they have grandiose plans to do so.

So, starting a company as a SGGC puts you in a pretty questionable category - you're in there with all those hopeless naifs who have more money than sense and have deluded themselves into thinking they have what it takes to make a game, and that their product doesn't suck, and that people will actually like it.

Let's suppose (and this is a pretty big supposition) that I'm actually not one of these naifs. Whether that's true is yet to be determined, but let's suppose anyway. In that case, if I start as a SGGC, anything I try to do in marketing my game could well be hindered by the fact that everybody else like me is an idiot with nothing but a crappy product and dollar signs in their eyes. Distributors and retailers (and even customers) are faced with lots of products from companies indistinguishable from mine, and most of them are useless, a complete waste of time.

What Ben and Rett and Michael say is that having a second product (or a third, or fourth), like Jackson did, lifts you out of this cesspool of incompetence and false hope, and demonstrates to distributors and retailers that you're serious. I can see the logic here. With multiple products, you can demonstrate that you've actually got a commitment and a plan, and that you're not in that category of one-shot losers. You gain real stature. Also, you can leverage your products - if somebody likes one of them, they're far more likely to try another game from your company; you can market all your games at the same time in the same ads; you can do package deals - you actually have the beginnings of a real product line.

But what are the challenges and costs to this approach, especially as a start-up? Well, for one thing, you have to have a second great game. That's harder than it sounds. And you have to go through all the production hurdles to get that second game designed, with art, printed, shipped, and manufactured, before you've even tried getting your first game sold.

Most importantly, this approach requires you to make the big bet - the giant initial investment in manufacturing - twice before seeing if you have a prayer at making it work. I've talked about the high costs and terrible margins of game manufacturing here, and the difficulties of making it work as a start-up here. Doing a start-up with two or more games means you're doubling all that risk, for a venture in which you have little experience, with a small hope of paying off anyway.

My gut feeling is that even if you've got multiple good designs and (more importantly) enough money to print a couple games at once, starting as a SGGC is probably a better bet. The increase in stature you get from having a second game out is not lost forever; you can always publish a second game, and you're free to capitalize on the benefits of that later. If, on the other hand, it turns out you're horrible at this, or your games suck, or you've been completely self-delusional about the whole thing, then you've saved yourself half the money you would have blown.

It's a tough question, though, and it hinges on some unknowables - how big a benefit is the increase in stature compared to the costs - and some big variables - how marketable your game actually is. From what I've seen, though, launching a game company start-up is a low-return, high-risk bet, so doubling down at the outset seems foolhardy.